Oil industry falls out of love with Trump
HOUSTON — The oil and gas industry’s relationship with President Donald Trump is cooling off.
The administration’s 25 percent steel tariff, hostility toward NAFTA and fumbled efforts to lift restrictions on drilling are worrying executives, who have praised the president’s war on regulations but loathe uncertainty and nationalistic trade policies.
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The tariff was a source of angst at a major energy industry conference this week in Houston. Executives fretted that higher steel prices could stifle projects needed to help the U.S. — the world’s biggest oil and gas producer — feed the global thirst for energy as a rising force in the export markets.
“We don’t think it would be appropriate to put a tariff on something you can’t buy in the United States,” said Greg Armstrong, CEO of Plains All American Pipeline, who worries it will become too hard to find the steel valves or other pipeline equipment the company needs. “That really kills the project.”
One company hoping to capitalize on the global appetite for natural gas, Freeport LNG, said its new Texas plant required 190 miles of new pipeline — and Trump’s tariffs would have been devastating had they been in effect at the time.
“We have seven Eiffel Towers’ worth of steel,” Freeport LNG chief Michael Smith told the conference, known as CERAWeek. “This thing would cost a few hundred million dollars more if we had to pay 25 percent more than what we did.”
The tariff moves are also unsettling senators in energy states who have backed Trump’s moves for the sector. Alaska Sen. Lisa Murkowski said the tariffs could add up to half a billion dollars to the price of a proposed 800-mile pipeline the state has long wanted to jump-start its natural gas production.
“This is not coming at a good time for us,” Murkowski said at the energy conference in Houston.
The industry’s top lobby group, the American Petroleum Institute, is sending its executive committee to the White House next week — a rare move by the group as it seeks to help the president “understand what the industry wants,” one source familiar with the meeting told POLITICO.
Seeking to calm the sector’s nerves, Interior Secretary Ryan Zinke and Energy Secretary Rick Perry flew to the conference and reiterated the administration’s support for higher oil and gas production.
“The thing I heard from businessmen and women most often while I was the CEO of this state was the regulatory stability,” Perry, the former Texas governor, told reporters in Houston. “The predictability of the regulatory world — that was where the real long-term effect could be positive or negative. That’s what the president’s intent is.”
But Perry himself roiled the energy world late last year with a now-jettisoned plan to prop up struggling coal-fired and nuclear power plants — a move that would have aided Trump’s supporters in the coal industry but harmed natural gas producers. Like Trump’s tariffs and attempt to renegotiate NAFTA, Perry’s proposal raised questions about the administration’s commitment to free markets, long a hallmark of GOP policies.
Meanwhile, Zinke’s shifting plans on opening federal waters for drilling, controversial moves to shrink the size of national monuments and attempts to ease restrictions on land use in Western states have drawn sharp legal challenges — making companies wary of venturing into new areas.